Exactly like the housing bubble. Then they gave out loans to people clearly unqualified, clearly unable to pay back the loan, low-documentation loans, no-documentation loans, interest only loans, negative amortization loans, etc etc. Now they colleges are egging on the students to assume enormous loans for useless degrees that will never get the student a job that could pay back the loan.
We should put the onus on the universities, to certify that if the student completes the degree he/she is seeking, there is at least some reasonable chance the loan will be paid back. They universities should disclose the mean and median starting salaries of the majors they are offering. Like the home loans used to have some basic rules like, "not more than 27% of gross for mortgage, not more than 34% for all loan payments, 20% down". Similar easy to grasp metrics should be made available.
But in a free market economy, if some people want to shoot themselves in their foot, there is nothing to stop them. But at least we someone should be telling them, they have a gun in their hand pointing to their feet and if they squeeze the trigger they will get hurt. Instead we are incentivising the bullet peddlers .